guide for purchase of a photocopier

8/13/2019 Guide for purchase of a photocopier

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The Plain Paper Copier Industry1

The volume of information being processed by corporations and individuals continues to

increase. In a typical office, a fax machine processed 300 to 400 pages per month, a printer

produced 1000 pages, and a copier reproduced 3,000 to 4,000 pages per month. After economic

slowdowns of the early 1990s, sales of office automation (OA) equipment were projected to grow

6% annually through the year 2000. Equipment was being replaced by new models as a result of

rapid technological innovations that characterized OA products. Most competitors were now

selling their fourth or fifth generation of copiers. Products that lacked advanced features did not

sell, even with reduced prices. Competitors were being forced to improve their own operating

productivity as copier prices fell and margins were squeezed.

Xerography was first invented by Chester Carlson, a Queens patent attorney, more than 50

years earlier. While the process was developed in 1941, the first copier was marketed in 1959 by

Xerox Corp. The first plain paper copier, the Xerox 914, weighted 648 lbs. and produced just

seven copies per minute. But the high price and large size of copiers kept the market from taking

off until the 1970s. In 1972, the major players, Xerox, Eastman Kodak and IBM, utilized their

own direct sales organizations. In the mid-1970s, Japanese manufacturers like Canon, Minolta,Mita and Ricoh entered the market and successfully created dealer networks for selling low volume

copiers with advanced technology and features. With the exception of Xerox and Eastman Kodak,

most U.S. companies exited copier production. In 1988, IBM exited the industry by selling its

copier division to Kodak. U.S. firms like Monroe, Pitney Bowes and Savin Corp. marketed re-

labeled Japanese-made copiers. Even Eastman Kodaks lower volume machines were being

sourced from Canon. There were rumors that Kodak was merging with Canon, as they developed a

strategic partnership. Analysts expected sales of copiers to continue their decline through 1997,

forcing further industry consolidation. With the drive to improve productivity, customers were

moving to more expensive and faster systems. Only seven or eight copier manufacturers were

expected to survive the projected shakeout. Future success depended on the ability of competitors

to develop new products in fields where differentiation was possible, and to launch high value

added products. The maturing of analog technologies was driving companies to continue productdownsizing, improve copier speed, and reduce prices. The advent of digital technology was

shifting the focus to improved productivity and multi-functional operations for new machines.

Plain Paper Copiers.

Copiers can be divided into three types: direct electrostatic-process copiers, indirect

electrostatic-process copiers called plain paper copiers (PPCs), and diazo copiers. Diazo copiers,

used mainly to copy large poster-sized originals like blueprints, had little demand for general

offices use. Direct electrostatic process copiers have been replaced by dry plain paper copiers and

are no longer manufactured in Japan. In 1992, Japanese PPC production accounting for 93.3% of

the total copier production and 85.9 percent of the total production value. In spite of the largemarket share of PPCs, total production declined 12.7% to 2.22 million units in 1992, or $4.7

billion in value (a 3.9% decrease from 1991). Because PPCs accounted for the overwhelming

majority of copier production, they have become synonymous with the term copiers.

When an original document is placed on a copier glass, called the platen, and the print

button is depressed, the copy process begins. First, the photoconductor drum or belt, which is

1William R. Boulton, 1995. All rights reserved.


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coated with a photoconductive material, receives a charge as it revolves and passes the corona

wire. Next the original document is scanned by a mechanical analog or digital scanner and the

image is read and transferred to the drum either through fiber optics, a series of lenses and mirrors,

or electronically via a laser diode. An electrostatic charge forms a latent image on the drum. Toner

and developer receive opposite electrostatic charges so that fine toner particles cling to larger iron

oxide developer particles which acts as the carrier. As the photoconductor revolves, toner clings to

a magnetic roller or brush and is deposited on the latent image of the drum. Next, the toner is

transferred to the paper via a charge from the corona. Heat is then applied to fix the image to

the paper. Finally, excess toner is cleaned from the drum by a brush or a blade before the cycle

begins again.

Toner determines the quality of the photocopy. Dry toner copiers are either dual

component or mono-component. Dual-component copiers mix toner and developer in a hopper.

Mono-component toner needs no developer. Dual component provides very good gray-scale

rendition due to fine particle sizes. It also tends to be less expensive than mono-component toner.

However, mono-component toning allows for simpler copier designs, easier access to internal

components, and lower maintenance costs. Liquid toner copying systems are lower cost and

eliminate dust from dry powders. Savin leads in liquid toner technology with its 1989 introductionof a toner injection canister system to dispense the toner, eliminating the tanks found on earlier

machines.

There are several types of photoconducting materials that cover the drum. Selenium (Se)

costs between $307 and $951 per drum; Selenium tellurium alloy (SeTe) costs between $185 and

$515 per drum, and organic materials cost between $175 and $578 per drum. Selenium drums are

more durable and can withstand copying volumes of between 60,000 and 500,000 copies. Organic

photoconductors are better for color but produce only 10,000 to 300,000 copies. Newer materials

like amorphous silicon cost from $1,425 to $1,570 per drum but have a life of 700,000 to 3 million

copies. Arsenic selenium, with durability and sensitivity that yields of about 280,000 copies, costs

between $243 and $863 per drum.

Quality and overall productivity have improved rapidly. Competitors improved the price

and performance of standalone copiers through modular product designs that improved

performance and reliability. Copier technology had progressed rapidly from mechanical to

electromechanical components. Modular options allowed customers to select their desired features

like multiple paper sources, document feeders and sorters, and duplexing. This allowed customers

to easily add functions like document feeders and larger paper supplies. Document feeders and

sorters have increased productivity. Desk sized copiers that made 20 copies per minute (cpm) were

now desktop size with better reliability and productivity without higher costs. Features like zoom

reduction and enlargement and two-sided duplex copying had become standard. Minolta introduced

zoom reduction and enlargement in a desktop copier in 1983.

Over the past decade, copier downtime fell from over 15% to under 1%. Technical

improvements reduced the number of moving parts and improved copier reliability. By placing a

document on a stationary platen, fewer moving parts were needed and fewer malfunctions

occurred. Development teams improved a copiers ability to work at rated speeds during

duplexing, feeding, sorting and stapling. A great deal of progress had been made in extending the

life of photoreceptors, particularly organic ones. The current generation of photocopiers employed

long-life, small-diameter organic photoreceptors. Prices had increased only 5% to 7% a year.


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The Growth in Color Copiers

While color displaced black and white in photography, movies, television and printing, it

had been slow to replace black and white copiers. Though Xerox introduced its 6500 color copier

in 1973, it wasnt until the mid-1980s that competitors entered this product segment. Kodak

introduced the ColorEdge color copier in 1985 capable of producing 23 copies per minute, nearly

five time the speed of Xeroxs newest 1005 color copier. By the 1990s, there were five major

processes being used in analog and digital PPC copiers: electrophotographic, photographic,

Cycolor, thermal transfer and ink jet. By 1993, the U.S. market had grown to $4 billion in sales

and was expected to top $15 billion by 1996.

The electrostatic process is used for plain paper black and white copiers. Toner is

transferred onto the paper by means of static electricity. With three or four developing units and

drums, maintenance is high and complex. Analog systems use a lens and mirror system to transfer

the image to a color filter that is applied to a photoconductor drum or belt followed by color

applications. Digital systems use a laser diode to transfer the scanned image to the drum. Color

software filters then determine the amount of color required from each developing unit. The image

is then fused to the paper with heat or pressure.

Photographic processes are equivalent to a photo lab in a box. Light is reflected off the

original onto a photosensitive material that is immersed in developer and exposed to a light source.

It is then bleached in a fixer solution, rinsed in a stabilizer liquid, and dried by heat. While this

provides the best color image, the required disposal of chemicals and ventilation is a problem. It

requires special photosensitive paper. The equipment is large and maintenance intense.

Cycolor, developed by Mead Corporation, was a simple process that incorporated all of

the needed chemicals for color in either a donor film or a receiver paper. Light sensitive

capsules reflect the colors from the original according to their light intensity. The film and paper

were then pressed together to burst the capsules and transfer the image. Because of its simplicity

and single exposure, the process was inexpensive and had little maintenance. Copy quality wasgood with brilliant color reproduction. Unfortunately, the process was slow, at 2 copies per

minute, and expensive per page due to paper costs. The paper also required special storage since it

was sensitive to light, humidity and heat.

Thermal transfer uses either wax or dye-based thermal ribbon to transfer color. The

original is transferred by digital image from the ribbon to the calendered paper via a heated print

head.. While the process is simple, it is slow due to the repeat cycles by ribbon color. It also

requires special paper.

Bubble jet technology sprays liquid ink onto the paper through tiny nozzles. Electric

current is applied to a resistor that surrounds an ink channel at each nozzle and causes a vaporbubble to form and break off several thousand times a second for each nozzle. This technology is

relatively simple, inexpensive to manufacture and inherently reliable. Unfortunately, it is slow at 1

copy per minute, requires special paper for good quality, and often has uneven ink absorption.

Canon offered color electrostatic digital copiers for $23,000 and $52,400, and digital ink

jet copiers for $4,495 and $5,995. Kodaks digital electrostatic ColorEdge copiers color copiers

were priced at $24,900 and $49,900. Xerox offered one for $47,500. Konica, Minolta and

Panasonic offered digital electrostatic color copiers for $19,480, $41,500 and $16,695


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respectively. Ricoh offered two analog electrostatic color copiers for $13,495 and $14,724, and

one digital model for $51,995. Toshiba offered a digital thermal transfer copier for $10,599.

Sharp introduced color copiers using thermal transfer. While the demand for color grew with the

introduction of color computer monitors, the market growth for color copiers was co-opted by the

introduction of affordable computer peripherals that generated color originals with dot matrix and

other non-impact printers. Prospective users with limited budgets could not justify top quality

color copiers and settled for lower quality color printers. Color copiers reached sales of about $2

billion by 1990, compared to total U.S. copier sales of $14 billion.

With the arrival of precise color copiers, currency counterfeiting recently has become a

problem in Japan and abroad. In September of 1992, a group of Japanese governors and ministers

issued a request that manufacturers of color copiers voluntarily develop and adopt technologies to

foil those who forge currency. In response, the Japan Business Machine Makers Association

announced that its members should apply existing forgery-prevention techniques in cooperation

with law enforcement and treasury authorities. By 1993, the copier manufacturers were

announcing numerous proprietary techniques for foiling counterfeiters. However, manufacturers,

law enforcement agencies and treasury officials agree that they must cooperate closely to refine

solutions. Meanwhile, copier manufacturers continued developing advanced technologies to offerthe functions that users request and to upgrade the performance of their products. Multifunction

peripherals that do fax, copy, scan and print were seen as an untapped $1.5 billion market for the

1990s.

Industry Structure

Japanese manufacturers commanded the largest share of the worlds copier market.

Starting in 1975, copier production and exports had grown rapidly. With growing trade friction

between Japan and its export markets in the 1980s, Japanese manufacturers were shifting to

overseas production. As shown in Tables 1 and 2, Japanese production dropped 14.4% to a low

of 2.21 million units or 458 billion yen in 1987. After a period of recovery, copier production in

volume for 1992 totaled 2.38 million units (a 10.5% increase over 1991), while sales stayed flat at550.7 billion yen. Exports fell in 1992 to 1.7 million units and 346.7 billion yen. While dropping

7.8% in units and 7.2% in value, exports still accounted for 71.6% of volume, and 62.9% of

Japans production value. In 1993, copier production fell 7.8% with 2.21 million units. The value

reached 524.1 billion, down 4.8% from 1992. In 1993, Japans copier exports continued to fall,

reaching 1.52 million units (down 10.7%) and 316.2 billion yen (down 8.8%). Exports accounted

for 68.8% of the copier production quantity and 60.3% of production value in 1993. As yen values

increased export prices in the 1990s, Japanese manufacturers were pressured to reduce costs.

Table 1: Production of Japanese Copier Machines (million yen)

1986 1987 1988 1989 1990

Copiers 503,012 457,963 481,856 501,829 523,319

Copier exports 386,413 335,933 297,769 329,718 352,824

Source: MITIs Annual Machinery Statistics

U.S. Copier Industry.

Sales, rentals and service for plain-paper copiers in the U.S. generated $14.2 billion in

1993 sales; the placements totaled 1.29 million units. Several key factors will effect future growth

of unit placements for copier product in he U.S. As market growth has slowed, manufacturing and


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distribution companies have formed alliances and consolidated. Conditions have made it difficult

for hardware vendors and distribution outlets to generate large profit margins on copier sales. The

yen-to-dollar exchange rate continued to fall during 1994 and 1995. As a result, vendors could not

maintain both pricing levels and profit margins. As prices increased, alternative products such as

network printers become more cost effective than copiers.

Table 2: Trends in Japans copier production

Year

Quantity

(units)

Change from

prior year (%)

Value

(million of yen)

Change from

prior year (%)

1988

1989

1990

1991

1992

1993 (1-6)

2,286,826

2,261,048

2,398,054

2,654,657

2,376,824

1,078,433

103.5

98.8

106.0

110.7

89.5

90.7

481,855

501,827

523,323

550,597

552,737

252,391

105.2

104.1

104.2

105.2

100.3

88.7

Source: MITI machine production statistics

The U.S. installed base totaled 5.9 million copiers which analysts believe will reach about 6.8

million by 1997. The large installed-base of copiers slowed the demand for new copiers. Since theearly 1990s, U.S. corporations have reorganized to more effectively process their business documents

for improved productivity and profitability. As companies moved to higher speed copiers, trade-ins

added used machines to the market. Because of economic recession and resulting delays in new

purchases, users were keeping their existing copiers longer, instead of upgrading and replacing

them. Higher exchange rates, corporate downsizing, and tight equipment budgets impacted all

segments of the copier market, causing new copier sales to slacken as used copier sales reached

200,000 units in 1993, approaching 15% of the new copier market. Fewer equipment purchases

combined with the rapid installation of computer networks with higher speed printers and the

introduction of multifunction machines has put the U.S. copier market in termoil. Corporations are

now focused on all aspects of communications including document creation and duplication. While

copiers provided the foundation of such systems in the past, pressure for price and performance

improvements have intensified to compete with new technologies. End users are very sensitive to price as

alternative products, like network printers, are proving to be more cost effective than copiers.

A customers justification for purchasing copiers was based on the cost per page. The

retail price was depreciated over a five-year period at selected monthly volumes. The service

contract cost was then dividing by the copying volume. The cost per copy of supplies and any

parts not covered by the service contract were then added. Table 3 shows these calculations for a

$6795 machine, with a full-service contract of $56.25 per month plus $0.012 per copy over 9,000

copies, plus paper, toner, and developer. The move to centralized copy centers with higher volume

output lowers the overall per page costs.

Table 3: The Cost per Copy in Purchasing EquipmentMonthly

Volume

Depreciated

Purchase

Price

Service

per

copy

Paper

cost

Toner

cost

Developer

cost

Total

cost per

copy

2,000

5,000

10,000

15,000

5.663

2.265

1.133

0.755

3.563

2.145

1.673

1.515

0.696

0.661

0.627

0.627

0.575

0.545

0.545

0.545

0.210

0.210

0.195

0.195

10.7

5.8

4.2

3.6

Note: Assumes volume discounts for paper, toner and developer.


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For comparison purposes, Table 4 shows the typical rental cost for the same machine. It

might cost $232.50 per month for the first 1,750 copies. The additional cost per copy to 3,000 is

$0.056, to 5000 is $0.029, and to over 5000 copies is $0.022 per copy. While the cost per page

was significantly higher, a firm has more flexibility in replacing the unit as their output needs

changed.

Table 4: The Cost per Copy in Renting Equipment

Monthly

Volume

Rental Paper

cost

Toner

cost

Developer

cost

Total cost

per copy

2,000

5,000

10,000

15,000

12.263

7.083

4.641

3.828

0.696

0.661

0.627

0.627

0.575

0.545

0.545

0.545

0.210

0.210

0.195

0.195

13.7

8.5

6.0

5.2

Note: Assumes volume discounts for paper, toner and developer.

According to a 1994 Dataquest survey of buyers, the six most important criteria for

buying copiers on a five point scale included:

1. Reliability 4.82. Copy Quality 4.7

3. Service Support 4.3

4. Price 4.2

5. Ease of Use 4.1

6. Productivity 4.1

7. Extended guarantees 3.8

8. OEM reputation 3.7

9. Speed 3.7

10. Reputation of sales outlet 3.6

Because of the large volume of copies made, reliability and customer service critical to counter-act

the wear and tear of machines. Lower volume machines, under 3,000 copies, require infrequentservice that can be performed by the user. Higher volume copiers, between 10,000 and 22,000

copies per month, require monthly service. The highest volume machines, over 38,000 copies per

month, require service every two to three weeks. Copy quality, price and ease of use had all

increased in importance in 1994.

The copier industrys profit-producing structure is based on the production and sale of

supplies like toner, and the sale of maintenance services. Profits are generated at four stages of the

copier business: development, manufacturing, sales (including toner and paper), and maintenance.

As a result, profitability depends on continued manufacturing and sales of copiers that need

supplies and service. With the exception of Xerox and Kodak, copier industry sales are generally

carried out by large number of independent sales channels that tailor their operations closely to

specific market segments. For example, certain office equipment dealers cater to the leadingcorporations.

Competitive Product Structure.

Dataquest, an industry research company, divided products into seven copier segments as

shown in Table 5. Dataquests categorization of segments differ according to price, speed of

reproduction, volume of output per month, and other capabilities. On the low end of Segment 1, in


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which the machines may have a monthly copy volume of only 1,000 copies, a photoreceptor that

will last for 50,000 to 100,000 copies will be the only photoreceptor needed during a copiers useful

life. Without the need to change the photoreceptor, maintenance contracts are not needed. This

removed any incentive for dealers to sell low-end plain paper copiers. Improved data

communications allowed vendors to offer remote diagnostic systems for top end models.Table 5: Dataquest Copier Product Segment DefinitionDataquestSegment

MulticopySpeed (ppm)

Machine Form/Platen

Paper Feed Average MonthlyCopy volume

Average RetailPrice ($)

MachineDescription

PC

1

2

3

4

5

6

Up to 12

Up to 20

21-30

31-44

45-69

70-90

91 & above

Tabletop/ moving orstationary platen

Tabletop/ moving orstationary platen

Tabletop/ stationaryplaten

Tabletop or console/stationary platen

Console or tabletop/

stationary platenConsole/ stationary

platenConsole/ stationary

platen

Single cassette

Single or dualcassette

Dual or triplecassettes or trays

Dual or triplecassettes or trays

Dual or triple

cassettes or traysDual or triplecassettes or traysDual or tripletrays

400

1,700

6,000

11,600

18,500

55,000

158,000

1,103

3,066

5,104

7,257

16,113

18,000-8000078,000-235,000

Minimally featured; easy to install;superior reliability; compact; light-weight;user serviceablePossible features; reduction, enlargement,zoom, sheet bypass, optional input/outputdevicesPossible features; reduction, enlargement,zoom, optional input/ output devices, LCC

Systems with standard features ofreduction/enlargement, zoom, feeder,sorter, and LCCHighly featured

Highly featured with finishing,input/output devices, magnificationLarge units with numerous peripherals andspecial features

Source: Dataquest (April 1994)

Competitors were trying to strengthen their position in the market by increasing speed,

lowering prices, and adding technology. The primary industry competitors were Canon, Kodak,

Konica, Minolta, Panasonic, Ricoh, Selex, Sharp, Toshiba, and Xerox. As shown in Tables 6 and

7, the Canon, Xerox and Sharp were the overall industry leaders with 25.7%, 18%, and 14.3%,

respectively, of the U.S. installed copier market by 1993. The leading competitors by segment

include:

1. In the personal copier segment, Canon with 56.2%, Xerox with 24.4%, and Sharp with17.5% accounted for 98.1%. Xerox had increased market share by 6.4% with equal loss to

Canon and Sharp.2. Competition in segment 1 was much more fierce with more equally matched firms. In 1993,Sharp, Xerox and Canon had similar shares with 17.2%, 15.6%, and 15.5% market shares.

Mita held a 10.7% share, followed by Konica with 7.4%, Minolta with 6.9%, Lanier with 6.3%

and Ricoh with 4.9%. Canon lost three percent share in 1993 to these other competitors.

3. In segment 2 markets, Canon and Xerox lead with 23.2% and 21.6% shares. Sharpand Minolta followed with 9.8% and 8.6% shares. Mita, Lanier, Ricoh, Toshiba and

Konica had similar shares at 6.3%, 6.0%, 5.5%, 4.5%, and 4.2% respectively. Pitney

Bowes held 3.1%. Mita lost 3.9% share in 1993, and Xerox lost 1.1% share to the other

competitors.

4. Segment 3 was nearly equally distributed between Minolta, Mita, Canon, and Sharp

with 11.2%, 11.1%, 11.0%, and 10.7% market shares. Both Minolta and Mita had gained

share in 1993 at the expense of Canon and Sharp. The next group of competitors also had


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5. In segment 4, Xerox held 23.5% share, followed by Canon with 18.4% and Mita with12.1% shares. Shares were relatively stable with other players having smaller shares.

Sharp had a 6.7% share, Konica 6.1%, Kodak 5.9%, Ricoh 5.5%, Lanier 3.7%, and

Toshiba 3.1%.6. In segment 5, Kodak lead with 18.7%, followed by Canon with 18.4%. Ricoh andMita held 11.5% and 10.2% shares, followed by Sharp with 6.3%, Lanier with 6.3%,

Xerox with 6.0%, and Minolta with 5.1%. Savin and Pitney Bowes lagged with 3.3% and

2.7% shares.7. In segment 6, Xerox dominated with 83.3% share. Kodak followed with 13.1%. Oceand Lanier held only 3.0% and 0.6% respectively.

As shown in Table 8, markets were divided by copier needs into low volume personal use

markets (with 27% of the market), moderate volume convenience markets(with 61% of the

market), high volume copy center markets, and super fast central printing markets. Personal copier

markets typically purchased copiers with speeds up to 10 copies per minute (cpm). Conveniencemarkets purchase copiers with speeds ranging from 10 to 45 cpm. Most larger customers were

replacing existing models with higher speed machines. As a result, competitors were increasing the

capabilities of their models. Panasonic had introduced low-end models with speeds of 12 cpm.

Such strategies of up-rating machines within each market without increasing prices were becoming

common and was affecting definitions of market segments. Convenience and personal copier users

are looking for low price, compactness, and ease of use. Copy centers used machines with speeds

between 46 and 90 cpm. Copy centers and central sites accounted for 13.8 percent of the PPC units

sold. Central duplicating centers used the highest speed copiers with over 91 cpm. Central sites

want the high tech, top of the line copiers with color capabilities, high speed, and interaction with

computers.

Table 8: U.S. Copier Market Usage ProjectionsCategory Speed (ppm) Average Monthly Volume

1992 1997

Personal Copying 10 or fewer 400 400

Convenience Copying 10 to 13

14 to 19

20 to 30

31 to 45

1,300

1,850

4,100

7,750

1,240

1,750

3,850

7,000

Copy-center Copying or Duplicating 46 to 69

70 to 90

17,600

49,500

14,350

46,000

Center-site Xerographic Duplicating 91 or more 178,000 162,000

Source: BIS Strategic Decisions

The personal copier marketnow included copiers with copy speeds as high as 10 to 12

pages per minute. Personal copiers had an average retail price in 1993 of $1103. Dataquest (April

1994) projected a decline in segment 1 copier placements from 480,000 units in 1993 to 380,000

units in 1998, declining an average of -4.66% annually. Competitors targeted the growth in home

offices to sustain future growth. However, copiers faced growing pressure from less expensive

printers that can create multiple original copiers. The rapid decline in laser printer prices was

making personal copiers less attractive. Panasonic was selling its laser quality post script LED


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printer for only $475. Multiple-function products that included printers, copiers, scanners and fax

also challenged the personal copier market. Most copier and printer firms introduced such

products in 1995 for prices ranging from $769 to $1500. Hewlett Packard and Panasonic

introduced printer/fax/copier machines for prices under $800 in early 1994. Lexmark introduced

its printer/fax/scanner/copier at only $825 in 1995. These new low priced multifunction products

were being primarily sold through mass merchandisers and discounters, including mail order. For

the typical low volumes required for personal use, these new machines were more than adequate.

BIS Strategic Decision estimates that the personal copier market will still account for 27% of the copies

produced by 1997.

Convenience copiersthat produced between 10 and 45 ppm and generated between 1,300 and

7,750 copies per month accounted for 66% of the U.S. installed base. Convenience markets needed in-

house capability of making copies as needed. As shown in Table 9, the mid-volume copiers had

maintained market share as users traded up to more productive machines. Accounting for two-thirds of

the copier market, convenience copiers provided the primary business for dealers that installed and

maintained most Japanese copier machines. The dealer sells high profit margins supplies and

services for these copiers. Dataquest expected segments 2 and 3 copier sales to continue through

the end of the 1990s as buyers enter into their third generation of copier purchases and seek higherproductivity, higher speed, and output finishing capabilities. These products will also generate

significant revenue and profits for the dealer community that relies on suppliers and service

revenue associated with these machine placements to generate profit. This segment is now being

targeted by manufacturers with copiers that incorporate digital technology. Manufacturers are now

offering 30-ppm copiers with digital imaging front ends. The digital front end allows for other

network functions such as printing, faxing, and scanning. As the network environment grows in

the business community, these multi-function products may penetrate under one percent of this

mid-volume segment that represents several hundred thousand units per year. For example, the

market does not understand the benefits of digital machines and users are typically not responsible

for network development. To make matters worse, manufacturers are using proprietary operating

systems that are not compatible with other software systems. Finally, these new multi-functional

systems are expensive and poorly positioned as a copier offering add-ons.

Table 9: Total Unit Placements by U.S. Market Segments

(000 units) 1986 1987 1988 1989 1990 1991

Total 70 plus ppm 22.8 29.5 30.6 31.5 33.3 34.9

High-volume share 2.7% 3.2% 3.1% 3.0% 3.0% 3.0%

Total 30-69 ppm 147.3 158.2 169.0 184.0 199.0 214.0

Mid-volume share 17.4% 17.1% 17.0% 17.4% 17.8% 18.3%

Total 0-29 ppm 677.0 738.0 797.0 841.0 884.0 918.0

Low-volume share 79.9% 79.7% 80.0% 79.6% 79.2% 78.7%

Total Industry 847.1 925.7 996.6 1056.5 1116.3 1166.9

Only a few machines had copy rates of 75 to 100 cpm. Products include such features as

duplexing, reduction/enlargement, copy editing, screen programming, photo mode, book copying,

cover insertion, automatic stapling, and job programming. Duplexing allows for as many as 50

two-sided copies to be made. Reduction/enlargement allows for copies smaller or larger than

originals to be made. The copy editing option allows users to make changes to the copy using

electronic pens. TV style screens, including touch pads, allow for on screen control. Photo mode

allows for photographic reproductions to be enhanced. Book copying allows for left and right

pages in an open book to be copied in a single pass. Cover insertion is part of the finishing process


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that allows users to insert document covers when sorting, binding, and stapling. Automatic

stapling is a finishing process options allow for staples to be placed in up to three different places.

Job programming allows copiers to handle a complete job with just the press of a few buttons.

Copy center machinesproducing 46 to 90 ppm and 17,000 to 49,500 copies per month. Units

in this market segment range in price from $25,000 to $40,000. Heavy duty copiers in this

segment, referred to as copier-duplicators, post speeds above 85 ppm and cost as much as

$150,000. BIS believes that the market will split between products offering 46 to 69 ppm machines and

more rapid digital equipment between 70 and 90 ppm. Central-site copiers, averaging 178,000 copies

per month, are expected to fall to about 162,000 copies per month as jobs move to digital equipment for

copying functions.2 The lower prices and growing acceptance of digital technology could make

copiers the least-sought-after machine in the office. As desktop digital printers gained speed and

affordability, they allowed individuals to make multiple originals rather than copies. Office copiers

were becoming machines of last resort when digital alternatives were not available. Dataquest

predicted a decline in the high-end plain paper, analog copier market over the next several years.

The copier volume from segments 2 through 5 (convenience and copy center markets)

represented the primary opportunity for profitability for copier dealers. This is also the targets fornetworked printer devices that offer post-processing functions and multi-functional devices that

serve as a printer first, moving the traditional standalone copy volume to other devices. The

predicted decline in paper use may now become a reality as local area networks, operating systems,

software applications, and connectable printers become integrated. If copier dealers are unable to

sell and service a wider range of networked equipment, they will lose in the competitive battle for

this copy volume and, therefore, will lose profitability.

Placements in Segment 5 were expected to increase in the immediate future as Japanese

manufacturers stressed sales of traditional analog machines in the 70- to 85-ppm range. While

Kodak enjoyed the largest market share for Segment 5 placements, competition was increasing

from both downscale and upscale competitors. Foreign firms entering this segment included Canon,

Konica, Mita and Ricoh. Oce, a Dutch manufacturer, also produced high volume copiers withadvanced features. Kodaks 1570/1575 digital product success was less than anticipated due to

technical problems. However, that engine has been adapted to act as a printer/copier. With

Kodaks long-standing reputation and penetration in this market, it is well positioned to take

advantage of the digital potential. If its new product line is successful, introduced in early 1994, it

expects to convert half of the Segment 5 placements to digital over the next five years. Kodak also

began selling high-end machines to Lanier in 1993 in an effort to penetrate Xeroxs dominance of

the Segment 6 market. While Lanier may compete with Kodak, Lanier is expected to compete with

Xeroxs sales and service of 1090 and 5100 model placements. Kodak had existing capacity to

supply Lanier, thereby reducing overhead costs to its imaging division.

As Kodak expands its placements through OEM sales, Xerox was offering networkedsolutions to high-volume users. Xerox introduced the networked version of DocuTech and the

lower-volume DocuTech 90 in 1992. Improvements to its network server have improved Xeroxs

position with central reproduction departments. While Xerox was targeting the offset press market

with its DocuTech family of products, it has actually displaced high-speed standalone analog

copiers, thereby differentiating its products from the Japanese manufacturers and strengthening its

2U.S. Copier Market Faces Threat From Color Printing Systems. Office Equipment & Products.

October 1994, p. 32.


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1980s. Canon and Ricoh began overseas expansion early and were building local parts distribution

channels. Star Micronics was building its position in the Chinese market and was highly cost

competitive in manufacturing printers.

The European Market. Generally, the European copier market concentrated on Western

Europe where users were familiar with copier products through decades of use. Analysts believed

demand for copiers in Eastern European countries would grow. According to reports, copiers were

extremely scarce in Eastern Europe, often available only to top-level managers and officials. Thus

many businesses in the region desired to upgrade their office equipment to include copiers.

However, lack of funds was a problem. For now, most vendors considered Eastern European

demand to be latent, though real.

Competitive Strategies

More for less defined the trend in the U.S. document creation and production

marketplace. Users had a wider selection of equipment than ever before to meet specific needs.

Furthermore, acceptable machines were available at lower prices than ever before. Against this

backdrop, vendors of copiers and printers were evaluating various product options to attract sales.Competitors explored alternatives for selling hardware and consumables, such as multifunction and

color copiers. Research and development expenses for the industry average over five percent of

sales.

Canon Incorporated. Canon entered the copier business in 1965 and introduced its first

copiers into the U.S. market in 1974. As shown in Table 10, Canon offered 16 different copier

models, from its small personal PC310 or NP6030 black and white models to its high speed, full

color CLC700/800 models released in 1994. As Japans leading copier company, Canon had total

sales in 1993 of $10.3 billion, of which 31% or $3.1 billion were copier sales. With the U.S.

recession and rising Japanese yen exchange rates, sales of copiers fell 8.1% in 1993. Profits also

fell to $203.1 million in 1993, a forth year of decline from the 1990 high of $548.3 million. To

counter the fall in sales and profits, Canon was diversifying into OA equipment and shifting itsmarket focus to Japan and Asian markets. Laser printers and ink jet printers were pushing total

sales.

Canon also introduced its new high speed and easy to use CLC700 and CLC800 are full

color copies that can produce color copies at a rate of seven copies per minute (cpm), and black

and white copies at 28 cpm. The CLC800 can produce two-sided copies automatically. The new

machines were designed to cut maintenance costs by reducing the number of components and

putting servicing items into easy to remove cartridges. The company began this strategy with the

introduction of its personal copiers in 1982. By using large photosensitive drums, the development

system can be stationary, allowing for constant toner quality. Artificial intelligence supports the

direct ejection system and varies the amount of toner by paper or transparency density regardlessof environmental factors. Laser beam and digital technology allow for superior color copies.

Fuzzy logic then analyzes this information and compensates accordingly to make the best possible

copies. Its high powered copier engines and precise controls have formed the basis of CLC line of

copiers. The new auto exposure system can distinguish between background and image areas,

automatically controlling density and color balance. It can change or delete background image,

without altering the color or density of the foreground image. The Intelligent Processing Unit can

handle originals from various electronic sources. The PostScript version links computers to the

copier for output of full-color documents. The Film Scanner permits output of 35mm and 4x5 inch


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negative or positive film. It features automatic focus, automatic negative and positive

identification, a wide zoom range, and trimming. A larger unit also handles 6x6 inch and 8x10

inch films. This model prints negative film, and overhead transparencies. A front loading design

draws from three 500-sheet cassettes plus a 50-sheet manual feed tray for originals as large of A3

and objects as heavy as 2kg. It also incorporates anti-counterfeiting functions.

Table 10: Canons Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Canon PC-311 1 $ 795 500

Canon PC-330 6 $ 795 500

Canon PC-330L 6 $ 995 500

Canon-PC-6RE 8 $ 1,295 750

Canon-PC-7 8 $ 1,595 750

Canon PC-11 10 $ 1,685 750

Canon PC-11RE 10 $ 1,695 750

Canon PC-12 10 $ 1,795 750

Canon NP-1020 10 $ 2,325 5,000

Canon NP-1500 15 $ 3,085 10,000

Canon NP-2120 21 $ 4,220 20,000

Canon NP-3050 30 $ 6,655 40,000Canon NP-4050 40 $ 8,850 60,000

Canon NP-4080 40 $ 11,800 60,000

Canon NP-6030 30 $ 5,940 40,000

Canon NP-6060 60 $ 23,235 125,000 Kodak Ektaprint 95

Canon NP-6650 50 $ 19,000 70,000 Kodak Ektaprint 90

Canon NP-6650E 50 $ 20,165 70,000

Canon NP-6650SF 50 $ 19,735 70,000

Canon NP-8530 83 $ 26,865 150,000 Lanier 6483

Canon NP-9800 83 $ 39,135 150,000 Lanier 6583

Canon NP-9850 85 $ 74,000 300,000 Kodak 2085

Canon CJ10 Color BJ Copier 0.69 $ 5,999 500

Canon CJ7 Color BJ Copier 0.65 $ 4,495 500

Canon Color BJ Copier AI 0.17 $ 120,000 500

Canon Color Laser 300 5 $ 20,400 5,000Canon Color Laser 350 5 $ 23,000 5,000 Kodak Coloredge 1525

Canon Color Laser 550 5 $ 52,400 10,000 Kodak Coloredge 1550

Canon GP55 Multifunctional 30 $ 12,995 40,000

Canon is also competing in printers, scanners and fax machines. Its flexible world-wide

manufacturing system was decentralized and sourced many parts locally to keep costs down.

Dealers were provided a full range of product and market support. In 1989, Canon USA was

named manufacturer of the year by the National Office Machine Dealers Association, winning gold

and silver medals in all nine areas of dealer support: product profitability, dealer relations,

marketing and advertising support, and sales training and service. The company sold its personal

copiers through all distribution outlets, from stationary and department stores to mail-order outlets.

Sharp Corporation. Sharpentered the copier business in 1972. The company had been

first to introduce a stationary platen on a desktop exposure type copier in the 1970s. As one of the

top three copier makers, the company had 15% of the world copier market and 7.5% of the

Japanese market in 1993. The companys product line is shown in Table 11. In the U.S., Sharps

market share fell from 22.1% in 1993 to 14% in 1994. Sharp had total sales of $14.6 billion in

1994 with a net income of $311.7 million. Exports accounted for 49% of sales. In the 1980s,

Sharp introduced its SF-750, a smaller and lighter copier. In the low-end market, Sharp developed


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compact and affordable copiers with features found on larger machines. Its low volume copier

sales had grown from 64,300 units in 1986 to 85,200 units in 1992. In the 1990s, the company

introduced the SD-3075, a fast, high volume copier that won Buyers Laboratorys Outstanding

Achievement Award for unmatched reliability for one million copies. In 1993, it introduced the

worlds lightest personal plain paper copier. To minimize downtime, Sharp developed modular

designs to shorten maintenance and repair times. To improve productivity, Sharp had the fastest

first copy time in low volume copiers at 5.9 seconds.

Table 11: Sharps Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Sharp Z-20 3 $ 550 150 Xerox 5201

Sharp Z-27 3 $ 749 150 Xerox 5306

Sharp Z-52II 8 $ 1,000 800

Sharp Z-57II 8 $ 1,100 800

Sharp Z-85II 10 $ 1,399 800

Sharp Z-88 10 $ 1,500 800

Sharp SF-2010 10 $ 2,350 2,000 Xerox 5280/5309/5310

Sharp SF-7320 13 $ 2,195 10,000 Lanier 6413

Sharp SF-7370 14 $ 2,950 10,000 Lanier 6514

Sharp SF-7800 15 $ 3,650 15,000Sharp SF-7855 15 $ 3,995 15,000

Sharp SF-7900 20 $ 4,850 25,000

Sharp SF-2022 22 $ 4,895 30,000

Sharp SF-2027 27 $ 5,595 40,000

Sharp SF-2035 35 $ 6,795 50,000

Sharp SF-8875 40 $ 7,695 60,000

Sharp SF-9400 50 $ 15,450 70,000

Sharp SF-9800 60 $ 19,450 100,000

Sharp SD-2060 60 $ 22,500 125,000

Sharp SD-3062 62 $ 28,500 150,000

Sharp SD-3075 75 $ 37,950 175,000

Sharps newest Basic Series of copiers were considered the best in class, offering topquality copies at exceptional speed. Simplicity of the design made the copiers compact enough to

be used by smaller organizations and were easy to use. Using developer in toner cartridges, Sharp

solved the problem of having to continually replace developer - a process which required service

and related delays. Sharps new basic copiers, such as the SF-2014, offered the best quality and

speed for its class. A new developer system contained developer in nospill toner cartridges. With

Sharps technology, the old developer is flushed out of the system and replaced with new developer

resulting in higher quality, consistent copies every time. While it has an automatic shut off feature

to save energy, the heat roller temperature is maintained to allow for 30 second restart. It also

avoids misfeeds and resets the controls. Auto-start allows for programs to be set while another task

is being accomplished. The model SF-2114 adds zoom/enlargement features. The model SF-2214,

is a high quality model with a single-pass feeder. Paper jams are minimized with the use of double-

feeder rejecter rolls trap a second unnecessary document and keeps the copier from misfeeding.Toner replacement uses no spill cartridges. An easy to use display panel reduces mistakes and

resets after a certain time interval. The three models weigh 26.2 kg, 26.7 kg, and 29.5 kg. Sharps

CX-7700 analog color copier was the fastest in the market at 7.5 cpm, and cost $20,000, as

compared to $15,000 for Ricohs 4 cpm color copier, or over $58,000 for either Canon or Fuji

Xeroxs 5 cpm color copiers.


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Sharp concentrated on selling in the personal and segment 1 copier markets in the U.S.,

segments 2 and 3 in Europe, and segments 4 and 5 in Japan. Sharp had six models in the personal

copier segment, five models in segment 1, three models in segment 2, two models in segment 3,

three models in segment 4, and one model in segment 5. Besides producing in Japan, segment 1

copiers are produced in Brazil, France, the U.K. and, by the end of 1995, in China. Segment 2

machines were produced in Brazil.

Ricoh Company, Ltd. Ricoh began to produce copiers in the 1960s. Ricoh had $9.4

billion in sales $92 million in profits in 1994. Over 84 percent of sales were in office equipment,

including facsimiles, printers, and copiers. Copiers were 66 percent of sales. Twenty five percent

of sales came from abroad. Both sales and profits had been declining in recent years as the value

of the yen increased. With a goal of automating the office, Ricoh produced the first digital fax

machines in 1973, establishing the fax transmission standard for telephone lines. The company

produced optical, chemical and digital components for its image processing products. Ricoh is one

of only three companies, along with Canon and Mita, to make photoreceptors, the high value added

component of copiers. Beginning in the mid 1980s, Ricoh went on the attack to overcome Canons

first to market strategy. In 1984, Ricoh introduced 17 new models, including two high speed

models that beat Canons to the market. Ricohs product line is shown in Table 12. Until 1982,Ricoh sold its copiers under the names of Savin and Pitney Bowes in the U.S. With the

introduction of its own brand, the company began working to develop its dealer network and mass

distribution system. Ricoh had become the second largest competitor in the U.S. by 1985.

Table 12: Ricohs Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Ricoh DS320 CX Multifunction 20 $ 10,837 12,000

Ricoh FT3113 13 $ 2,090 7,500

Ricoh FT3313 13 $ 2,610 7,500 Savin 9130

Ricoh FT4220 20 $ 4,385 15,000 Savin 9130Z

Ricoh FT4222 22 $ 4,990 20,000 Savin 9020

Ricoh FT4415 15 $ 3,590 10,000 Savin 9022

Ricoh FT4427 27 $ 5,860 30,000 Savin 9150Ricoh FT4727 27 $ 6,891 30,000 Savin 9270

Ricoh FT5433 33 $ 6,590 40,000

Ricoh FT5733 33 $ 7,835 40,000 Savin 9330/Gestetner 2533Z

Ricoh FT5570 43 $ 9,497 60,000 Savin 9335/Gestetner 2533ZD

Ricoh FT5590 50 $ 11,295 65,000 Savin 7430/Pitney Bowes D743

Ricoh FT6645 45 $ 11,249 60,000 Pitney Bowes M750/Savin 7500

Ricoh FT6655 55 $ 15,499 85,000 Savin 9450

Ricoh FT6750 52 $ 15,961 85,000 Savin 9550

Ricoh FT7870 71 $ 21,009 120,000 Savin 9520

Ricoh FT8780 80 $ 38,104 175,000 Savin 9710/Minolta EP 9720/Toshiba 7110

Ricoh FT8880 80 $ 38,104 175,000 Savin 9080

Ricoh NC305 Full-color 5 $ 14,724 20,000 Savin 9080RF/Toshiba 8050/Gestetner 2580

Ricoh NC8015 Full-color 15 $ 51,995 20,000

Ricoh VT1730 Duplicator 130 $ 5,995 100,000 Gestetner 5303/AB Dick PrinTech 6120

Ricoh VT2105 Duplicator 120 $ 9,865 120,000 Gestetner 5325/ABDick PrinTech 6520

By 1992, Ricoh had lost share and profit due to the rising yen. In response, it stressed low

cost manufacturing, quality control, and product development to meet customer needs. The

company offered both low end and high end electrostatic copiers. It focused on growth markets

like multi-function and color machines. Ricohs two new FT 6600 series FT 6645 and FT 6665

models were productive, functional, and reliable, offering 45 cpm and 65 cpm, respectively with


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1,000 and 500 sheet cassettes, a 1,500 sheet tray, a 50 sheet bypass tray, and a 3,500 optional

sheet tray for large tasks. The ST 25 sorter-stapler allowed for four different stapling positions.

The ST 400 finisher stacked up to 1,500 large size copies, or 30 sets of documents per task. An

LCD touch panel turned off with non-use and alerted users to lack of toner or paper. Ricohs non-

polluting organic photoconductor drums require little service. Image transfer was improved using

fuzzy logic controls.

Konica Corporation. Konica was founded in 1873 as a photographic and lithographic

supply store. It entered the camera business in 1903. In 1971, Konica introduced its first plain

paper copier. The company placed over 63,000 machines in 1993. By 1994, Konica had sales of

$5 billion and net income of $42.6 million. Its copier products are listed in Table 13. To stimulate

sales growth, the company was in pursuit of market share by targeting the mid- to high-end copier

segments and next generation PC driven multifunctional digital products that incorporated

facsimile, copier and printer functions into a single stand-alone unit. The Konicas PC-driven Fax

860L and 865L provided laser printing on plain paper, memory for fax transmission, and copies in

9 seconds. Konicas 7728 multifunctional digital color copier/printer, priced at $20,065, targeted

the color market. The PC-driven Konica 7310, also a multi functional copier/printer/facsimile

priced at $3,695, was targeting segment 1 where the market was shifting to multifunctional units.To assist its five regional sales managers, digital products managers were appointed in each region.

Konica provides distribution through dealers.

Table 13: Konicas Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Konica 9028 COLOR 6.5 $ 19,480 20,000

Konica 1112 12 $ 2,300 5,000

Konica 1290RE 12 $ 2,980 5,000 ABDick 2012RE

Konica 1590 15 $ 3,490 10,000

Konica 2020 20 $ 4,440 30,000 ABDick2018/7120

Konica 2028 28 $ 5,880 40,000 ABDick7226

Konica 8028 28 $ 8,140 20,000

Konica 3135 35 $ 7,160 50,000 ABDick7335Konica 4090 40 $ 6,130 50,000

Konica 4145 45 $ 10,350 70,000 ABDick7445

Konica 4155 55 $ 17,773 100,000 ABDick7455

Konica 4255 55 $ 21,288 100,000 ABDick7455RDH

Konica 6090 60 $ 19,560 150,000 ABDick2060

Konica 4065 65 $ 21,990 150,000 ABDick7463

Konica 7090S 70 $ 21,400 150,000 ABDick2070

Konica 7090RF 70 $ 23,995 150,000

Konica 5080 80 $ 26,920 150,000 ABDick7577

Konicas new CS-PRO 6192 is a small but powerful machines capable of large volume

copying at 92 cpm. It makes the first copy of a run in 3.3 seconds. Up to 9,999 copies can be put

into memory, allowing for interruptions for small tasks. It can remember up to 25 differentsettings and holds up to 7,500 sheets of paper. It can automatically adapt toner applications to

different paper types. It feeds 100 originals a minute, while offering 100 percent efficiency in copy

output. It can also copy two originals onto a single sheet, or two sided originals onto two-sided

copy sheets. The photo mode evaluates variations in density and sets the correct amount of toner.

The touch sensitive control panel used a full-dot LCD for conversational operations. Custom

selections include copy quantity, density, magnification, and size. Mixed sizes can be stacked

together without resetting the machine. The automatic magnification selection function matches


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digital-based products, and consolidated departments to develop multifunctional products. To cut

costs, the company had established a factory for these products in China.

Minolta designed their line of CS-Pro copiers to save space, time and the environment. It

included ease of operation, minimal maintenance, service, premium reliability, quality and

productivity, and earth friendly operation. A new type developer allowed for the best quality image

transfers in the industry and lower levels of ozone emissions than previous models. Their smallest

EP 2050 model reproduced up to 99 copies at 25 cpm using preset functions. It included

automatic size and magnification selection to handle variable sized originals. Cassettes were

automatically switched when one was empty. Preset functions allowed for repetitive tasks and job

interruptions. The EP 1050 and EP 1080 offered lower copy speeds at 15 and 18 cpm,

respectively. The EP 3050, the EP 4050 and EP 6000 operated at speeds of 35, 45, and 60 cpm.

The companys product line is shown in Table 15.

Table 15: Minoltas Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Minolta CF80 Color 7 $ 41,500 10,000

Minolta EP 2121 12 $ 2,695 3,500 Olympia 1201/Panasonic FP-1275

Minolta EP 2130 13 $ 2,050 12,500 Olympia 1320

Minolta EP 2130 pro 13 $ 2,525 12,500


Minolta EP 2152 pro 15 $ 3,595 15,000 Olympia 1502

Minolta EP 2150 15 $ 2,995 7,500

Minolta EP 2152 15 $ 2,845 15,000

Minolta EP 3170 17 $ 3,750 20,000

Minolta EP 3190D 19 $ 4,085 20,000 Olympia 1700


Minolta EP 4233 pro 23 $ 5,935 30,000 Olympia 2301

Minolta EP 4300 30 $ 6,995 40,000



Minolta EP 4321 32 $ 6,345 50,000

Minolta EP 5401 40 $ 8,500 50,000



Minolta EP 8600 60 $ 17,945 125,000 Panasonic FP-6070/Olympia 6000

Minolta EP 8601 60 $ 23,395 125,000 Panasonic FP-6080/Olympia 6001

Minolta EP 8602 60 $ 22,250 100,000 Panasonic FP-6090

Minolta EP 9720 71 $ 25,450 125,000 Savin 9710/Toshiba 7110/Ricoh FT7870

Minolta EP 9760 76 $ 27,250 200,000 Panasonic FP-7650

Matsushita Electric Industrial Co., Ltd. Panasonic is a brand name of Matsushita that

is used for many of its consumer products. The companys communication and industrial

equipment group accounted for about 25% of Matsushitas $43.5 billion in sales, or $12 billion.

With net income of only $431 million in 1994, the company had gone through much restructuring.Panasonic entered the copier market in 1982 and was #11 in share with 1.6 percent market share in

1993. Its product line is shown in Table 16. The companys least technically sophisticated

personal copier models, the FP-820 and 830, had speeds of 12 copies per minute and a single

cassette. They were lightweight, compact, and could be installed and serviced by the user. At a

price of $1,023, it also allowed for five different colors to be used for copies.


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Table 16: Panasonics Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Panasonic FP-830 8 $ 1,595 1,500

Panasonic FP-1270 12 $ 1,995 3,500 Olympia 1201/Minolta EP-2120D&2120

Panasonic FP-1680 16 $ 3,595 15,000

Panasonic FP-1780 17 $ 3,795 15,000 Lanier 6717/Pitney Bowes 9317

Panasonic FP-2080 20 $ 3,995 20,000

Panasonic FP-2680S1 26 $ 7,653 25,000 Pitney Bowes 9326

Panasonic FP-2680S2 26 $ 9,504 25,000 Pitney Bowes 9332

Panasonic FP-3280S1 32 $ 8,653 35,000

Panasonic FP-3280S2 32 $ 10,129 35,000

Panasonic FP-4080S1 40 $ 10,232 50,000

Panasonic FP-4080S2 40 $ 11,032 50,000

Panasonic FP-5060 50 $ 11,995 60,000

Panasonic FP-6070 60 $ 16,995 100,000 Minolta EP 8600/Olympia 6001

Panasonic FP-6090 60 $ 23,095 100,000 Minolta EP 8602 Pro

Panasonic FP-7650 76 $ 27,495 175,000 Minolta EP 9760

For segment 1, Panasonic had six new new 80-Series copier models that included digital

microprocessor with neuro-fuzzy logic controlled copier functions through an array of sensors to

determine exposure, voltage, and toner density. The result was stable, fine-quality copy images

with dense, solid blacks, clean edges, and sharp image reproduction. The FP-1680 made 16 copies

per minute, while the FP-4080 delivered 40 cpm. Optional sorters were 10 to 20 bins. The 20 bin

system had a staple sorter. The modular front-loading design featured 250 sheet paper drawers for

A3 to A5, plus 50-sheet bypass feeders, with optional paper drawers with up to 2,000 sheets. The

FP-1680, 1780 and 2080 were rated as above standard reliability by a Office Products Analyst

survey. These copiers had an average retail price of $3,136.

For segment 2, Panasonics FP-2680 model, part of the 80 series, operated at 26 cpm and

included reduction, enlargement, and zooming features. The environmentally friendly machine was

quiet, low dust and ozone emitting, and used recycled paper with its organic photoconductor drum

with a capacity of up to 2800 sheets and automatic duplexing. For segment 3, Panasonics FP-3280 and 4080 included automatic document feeders, 20 bin staple sorters, supermagnefication,

and a multicolor option. The FP-4080 won the Hansons Guidelines gold Medal for Superior

Copy Quality. It was also ranked as best in average number of copies between service calls, with

the FP-3380 coming in second. For segment 4, there was the FP-7450 model. On January 3, 1995,

Panasonic introduced the FP 7160 copier into segment 4. It used touch screen display to control its

60 cpm speed. Panasonic used Minoltas products to fill its line, as is done by 80 percent of the

competitors. For segment 5 Panasonic included the FP-7650.

Panasonic redesigned its factories to produce the new 80 series copiers. Production comes

from factories in Japan and Germany bearing ISO9002 certification. Panasonic produced its own

copiers, except for the FP 7160/7650 which were purchased from Minolta. Canon, Minolta, and

Pitney-Bowes all use Panasonic copiers to fill their low end market segment gaps. Panasonicproduced approximately 70% of its copier components in-house and supplied components to

Canon and Minolta. Panasonic had only 325 active U.S. copier dealers. It had begun to

incorporate master dealers in central locations to support areas that with poor market share. With

this central dealer system, the companys exclusive branch dealers enjoyed lower overall product

costs to increase sales volume and promote expansion. The dealer service agreements consisted of

either regular service, full service, or total maintenance service. The regular service agreement

included parts and labor, but not supplies, for .9 cents per copy. Full service included everything


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but paper for 1.8 cents per copy. Total maintenance included everything for 2.5 cents per copy.

Dealers responded to service calls within 4 to 8 hours on-site. Leases on the newest machines were

from 2 to 5 years with separate maintenance agreements.

Mita Corporation. Mita is a privately owned Japanese company established in 1934 to

produce diazo (blueprinting) machines. The company employees 5,000 persons worldwide, and

430 in North America. Mita was focused on digital technology that allowed for office

interconnectivity. About one-third of Mitas employees were engineers who worked in project

teams to continuously improving and upgrading products. Its advertisements emphasize that All

we make is great copiers. The company developed full-featured products. They were working to

design fax, copier, and scanner machines that interconnected with the computer as multifunctional

machines. In fact, the company sold a full line of fax, copier, and printer equipment. Consumer

awareness surveys found that 82 percent of individuals recognized the Mita name.

In 1946, Mita began producing diazo paper and became the leader after introducing the

worlds first compact blueprinting machine in 1951, the first office-use diazo copy machine in

1956, and the first electrostatic copier with moving platen in 1968. Its headquarters and main

factory in Osaka produced over 60 percent of its copiers and printing equipment, but produced lowend copiers in Hong Kong. The company produced its own drums, toner and developer in-house.

Mita Copystar America, Inc. was established in New Jersey in 1973. In 1982, the company began

production in its Saitama factory using the most advanced production technology available to

supply the U.S. The U.S. was divided into five regions centered around Los Angeles, Dallas,

Atlanta, Chicago and New Jersey. Dallas, the U.S. distribution and training center had a fully

automated parts warehouse and distribution center with on-line computer connections to regional

offices for high speed order processing and shipping. Mita entered Canada in 1977 and introduced

the worlds first desktop plain paper copier in 1978. In 1981, Mita launched the worlds first voice

activated copier. Mita was introducing the fastest copier in the industry (92 copies per minute) in

1995, as well as multifunctional copiers. Mitas product line is shown in Table 17.

Mita typically sold its high quality, full-featured machines for 10-15% below competitors prices.A comparison of Mitas new AC-6500 with Canons NP-9330 is shown in Table 18. The primary

concern for recent developments was quality, since one malfunction in a multifunction machine

would cause all other components to be unusable. These developments have taken Mita away from

being just a copier company. The companys overall mission was based on reliability first. No

machines were sold to dealers until Mitas officers were certain that they had a minimum defect

probability. However, to facilitate repairs and service, Mita offered its customers access to Mail

Boxes Etc. centers, located in 2,000 locations across the U.S., for packing and shipping to Mita.

The company held regular meetings with its dealers to get feedback and internally to improve

operations. Copiers with speeds of 45 cpm or higher had guarantees for three year or through the

recommended maximum copy volume if purchasers maintained a full service maintenance

agreement and used branded supplies.

Toshiba Corporation. Toshiba was the worlds 25th largest industrial corporation with

$39.9 billion in sales and $177 million in profits in 1993. Its businesses included information and

communications systems, information equipment and consumer electronics, power systems and

industrial equipment and electronic components and materials. The companys goals were targeted

at growth in information and semiconductor businesses, focus on group developments, and

globalize operations using strategic alliances. Portable personal computers, audio visual

equipment, appliances and copiers were part of information and communications systems.


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Table 17: Mitas Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Mita DC-1415 14 $ 2,195 5,000 Gestetner 2301/Monroe RL914/Copystar 1415

Mita DC-1435 14 $ 2,545 5,000 Gestetner 2302/Pitney Bowes 9014/Monroe 914Z/Copystar 1435

Mita DC-1455 14 $ 3,195 5,000 Gestetner 2303Z

Mita DC-1685 16 $ 5,295 15,000 Royal 2018/Gestetner 2318Z/Monroe RL-918Z/Copystar 1855

Mita DC-1824ZS 16 $ 12,495 5,000

Mita DC-1855 18 $ 3,795 15,000 Royal 2018/Gestetner 2318Z/Monroe RL-918Z/Copystar 1855

Mita AC-6500 Digital 20 $ 8 ,995 15,000

Mita DC-1824F 20 $ 13,995 5,000

Mita DC-2155 22 $ 4,395 15,000 Pitney Bowes 9023/Copystar 2021/Monroe RL-922ZMR

Mita DC-2285 22 $ 6,195 20,000 Royal 2222/Gestetner 2322ZD/Copystar 2085/Monroe RL-922DX

Mita DC-3055 30 $ 4,995 25,000 Gestetner 2430/Royal 2030/Monroe RL-1230M

Mita DC-3555 35 $ 5,895 40,000 Gestetner 2335Z/Royal 2035/Monroe RL-935

Mita DC-3755 37 $ 6,595 45,000 Monroe RL-937/Gestetner 23337Z/Royal 2037

Mita DC-3785 37 $ 9,495 45,000 Monroe RL-937DX/Pitney Bowes 9337/Gestetner 2337ZD/Royal 2237

Mita DC-4555 45 $ 7,195 50,000 Royal 2045/Gestetner 2345Z/Monroe RL-945/Pitney Bowes 9045S

Mita DC-4655 46 $ 8,195 50,000 Gestetmer 2346Z/Monroe RL-946

Mita DC-4685 46 $ 10,695 50,000 Monroe RL-946DX/Pitney Bowes 9346/Gestetner 2346ZD/Royal 2246

Mita DC-4685F 46 $ 12,695 50,000Mita DC-5685 56 $ 16,995 75,000 Monroe RL-956DS/Pitney Bowes 9056/Royal 2256/Gestetner 2356ZDF

Mita DC-5690 56 $ 17,995 75,000

Mita DC-7090 70 $ 2 0,995 100,000 Pitney Bowes 9070/Monroe RL-970DS/Royal 2270

Mita DC-8585 85 $ 33,995 200,000 Gestetner 2485ZDF/Monroe RL-985DS

Mita DC-6090 60 100,000

Table 18: Comparison of Mita and Canon copiers

Mita AC-6500 Canon NP-9300

Suggested Retail Price

Weight

Warm Up Time

First Copy

Copy Size MinimumPaper Capacity

Reduction

Enlargement

Color

Duplexing

Marker Pen

Time/Date

Shadow Erase

Memory Card

$8,995

55 pounds

90 seconds

8 seconds

4.5 x 5.5750 sheets

Six modes

Four modes

Five colors

Standard

Yes

Yes

Yes

Yes

$19,500

324 pounds

6 minutes

10 seconds

8.5 x 11500 sheets

Three modes

One mode

Black & Brown only

Optional for $2,300

No

No

No

No

Toshibas models were generally priced higher than the average competitive product as shown in

Table 19. It had 350 dealers with no other distribution or advertising activities. U.S. market sharewas only 3.6% in 1993, down from 3.8% in 1992. Toshiba produced copiers that ranged from

small single sheet machines starting at 12 cpm to large multifunctional machines with dual paper

trays and speeds up to 80 cpm. Actual 1993 sales of 51,100 units included 29,600 units in

segment 1, 9,800 units in segment 2, 6,900 units in segment 3, 4,600 units in segment 4, and 200

units in segment 5. The company has targeted the mid-range market with its 5540 and 6550 models

of 55 and 65 cpm. Toshibas ease of use surpassed most other machines in the market. Its new

digital Premage 15DX copiers can act as a printer at 15 cpm.


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Table 19: Toshibas Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Toshiba 1210 12 $ 1,825 5,000 Lanier 6112

Toshiba 1350 13 $ 2,695 7,500

Toshiba 1650 16 20,000

Toshiba 1710 17 $ 3,740 20,000Toshiba 2050 20 25,000

Toshiba 2500 25 $ 5,020 25,000 Lanier 6425

Toshiba 2550 25 $ 6,999 30,000 Lanier 6725

Toshiba 3210 32 $ 6,789 35,000 Lanier 6432

Toshiba 3220 32 $ 7,935 40,000 Lanier 6532

Toshiba 4010 40 $ 9,419 50,000 Lanier 6540

Toshiba 4550 45 50,000

Toshiba 5010 50 $ 11,999 60,000 Lanier 6450

Toshiba 5020 50 $ 13,299 60,000 Lanier 6550

Toshiba 5540 55 100,000 Lanier 6755

Toshiba 6550 65 $ 21,599 120,000 Lanier 6765

Toshiba 7110 71 $ 20,999 120,000 Savin 9710/Ricoh FT7870/Minolta EP9720

Toshiba 8050 80 $ 37,285 175,000 Ricoh FT8880/Savin9080RF/Gestetner 2580

Toshiba BD-9240 60 $ 18,899 100,000 Lanier 6360Toshiba 1000 Full-color 1 $ 10,499 1,000

Eastman Kodak Company. With $16.4 billion in 1993 sales, Kodak lost $1.5 billion. Its

imaging products accounted for $7.2 billion and had profits of $1.1 billion. In 1988, Kodak

became the leader in high volume color copiers with its ColorEdge copier for $59,500 which

allowed users to add color to any part of the copy by the touch of a pencil. These color copiers

were four times faster than any in the market at that time. In 1991, Kodak introduced the 1500

series for prices between $34,000 and $47,000 which used scanner instead of copier technology,

provided stapling, book making, insertion, and folding capabilities. Its product line is shown in

Table 20.

The company introduced its Lionheart printing system to rival Xeroxs DocuTech line. Itheld 35% and 30% of the high and medium volume markets, respectively. The companys goal

was to improve office productivity and take sales and share away from Xerox. The company spent

$1.3 billion on R&D, developing new material and components. They are developing scanner, fax

and printing capabilities into advanced copiers. The company was putting their focus on document

imaging. Kodak models 1570 and 1575 could scan a document electronically, store images, and

print upon demand. The companys copiers sold at premium prices. Delayed releases and

reliability problems hindered Kodaks copier business until cost cuts and quality improvements

were accomplished over the past several years.

Kodak had seven major distribution centers in the U.S. and fifty, worldwide. Copier

factories were located in the U.S., Mexico and West Germany. The Customer Assistance Centermade sure equipment worked and was installed properly. With the acquisition of IBMs copier

business in 1989, Kodak obtained many of IBMs former clients. Kodak hired 1100 IBMs copier

service representative and 200 sales representatives. By forming partnerships with Canon and

Lanier, Kodak believed it could take share from Xerox. The company also sold its high end

copiers OEM to Japanese firms. Kodak had little promotion of its copier business and relied on

word of mouth sales. The growth in competition with lower priced machines caused problems.


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Table 20: Kodaks Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Kodak 1525 Coloredge 5 $ 24,900 4,500 Canon Laser Copier350

Kodak 1550 Coloredge 5 $ 49,900 10,000 Canon Laser Copier550

Kodak 7016 EktaplusMulitfunction

6 $ 5,495 15,000

Kodak 90 Ektaprint 50 $ 18,000 50,000 Canon NP-6650II

Kodak 90E Ektaprint 50 $ 19,200 50,000

Kodak 95 Ektaprint 60 $ 26,300 125,000 Canon NP-6060

Kodak 95S Ektaprint 60 $ 28,400 125,000

Kodak 95SS Ektaprint 60 $ 29,400 125,000

Kodak 150 70 $ 21,000 200,000

Kodak 150F 70 $ 24,000 200,000

Kodak 150P 70 $ 26,000 200,000

Kodak 220F 70 $ 41,000 150,000

Kodak 220FS 70 $ 44,000 150,000

Kodak 220S 70 $ 44,000 150,000

Kodak 225F 70 $ 47,417 250,000

Kodak 225S 70 $ 50,357 250,000

Kodak 225AF 70 $ 53,297 250,000

Kodak 1570 Digital 70 $ 40,800 125,000

Kodak 1575 Digital 70 $ 57,300 125,000

Kodak 1580 Digital 70 $ 70,500 150,000

Kodak 1580A Digital 70 $ 78,500 150,000

Kodak 185F 85 $ 34,850 300,000

Kodak 185AF 85 $ 37,850 300,000

Kodak 235F 85 $ 67,500 300,000

Kodak 235S 85 $ 70,500 300,000

Kodak 235AF 85 $ 73,500 300,000

Kodak 2085F Duplicator 85 $ 74,000 500,000 Canon NP-9850

Kodak 2085S Duplicator 85 $ 77,000 500,000

Kodak 2085AF Duplicator 85 $ 80,000 500,000

Kodak 300F 100 $ 99,000 500,000

Kodak 300AF 100 $ 105,000 500,000Kodak 3100F 100 $ 101,000 1,000,000 Lanier 7100

Kodak 3100AF 100 $ 107,000 1,000,000

Kodak 3100AFB 100 $ 113,000 1,000,000

Kodak 2110 110 $ 78,000 500,000

Xerox Corporation. With sales of $14.6 billion, Xerox had a net loss of $193 million in

1993. Having introduced the plain paper copier in 1959, Xerox was the undisputed industry leader

until the 1970s. With entry by Japanese competitors between 1976 and 1982, Xeroxs market

share fell from 82% to 41%. Xerox responded with total quality management and improved

product development. Suppliers have been reduced from 6,000 to 400. Xerox was broadening its

markets by selling to over 3000 retailers like Wal-Mart. With its three year total customer

satisfaction guarantee, Xerox regained share in the low end markets. Development focused on firstto market introductions.

Xerox is now third in the industry with 12.8% of the world market. Xerox is the industry

leader in both the high-end and medium volume market segments, holding 54% and 35%

respectively. Xeroxs product line is shown in Table 21. Modular designs and development teams

increased the speed of duplexing, feeding, sorting, and stapling plus related reliability. Its

DocuTech series was digital and could be instructed on a network by a computer. The company


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also introduced multifunctional machines with fax, print, and copy capabilities for $1795, that sell

for as little as $1295. Xerox invested 6.6% of sales in R&D.

Table 21: Xeroxs Product LineMODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Xerox X-NOTE 1.5 $ 249 50 QuadMark PassPort

Xerox 5201 3 $ 299 300 Sharp Z-20Xerox 5203 3 $ 339 300

Xerox 5305 3 $ 359 300 Sharp Z-23/25

Xerox 5205 3 $ 399 300

Xerox 5210 3 $ 399 300

Xerox 5306 3 $ 399 300 Sharp Z-27

Xerox 5220 5 $ 995 500 Sharp Z30

Xerox 5760 6 $ 29,750 10,000

Xerox 5760ADF 6 $ 31,580 10,000

Xerox 5765 6 $ 31,750 10,000

Xerox 5775 SSE Full-color 7.5 $ 47,500 30,000

Xerox 5240 8 $ 1,295 1,000 Sharp SF-Z55

Xerox 5260 8 $ 1,695 1,000 Sharp SF-Z75

Xerox 5309 10 $ 899 1,500 Sharp SF-2010

Xerox 5310 10 $ 949 1,500 Sharp SF-2010

Xerox 5280 10 $ 1,049 1,500 Sharp SF-2010

Xerox 3010 Multifunction 11 $ 7,295 3,500

Xerox 3010ED Multifunction 11 $ 8,195 3,500

Xerox 5313 12 $ 1,599 2,000

Xerox 5011 RE 12 $ 1,695 3,500

Xerox 5012 12 $ 2,540 10,000

Xerox 5312 12 $ 2,540 10,000

Xerox 5014 12 $ 3,115 10,000

Xerox 5314 12 $ 3,115 10,000

Xerox 5016ZT 18 $ 2,995 20,000

Xerox 5018 18 $ 3,325 20,000

Xerox 5016ZTA 18 $ 3,995 20,000

Xerox 5018Z 18 $ 4,185 20,000

Xerox 5016 ZTAS 18 $ 4,995 20,000

Xerox 5318 20 $ 3,710 10,000

Xerox 5320 20 $ 4,265 10,000

Xerox 5322 20 $ 7,400 10,000

Xerox 5021 21 $ 4,505 20,000

Xerox 5028 28 $ 4,755 30,000

Xerox 5328Z 28 $ 5,375 30,000

Xerox 5028Z 28 $ 5,540 30,000

Xerox 5034ZTA 28 $ 8,300 30,000

Xerox 5334 32 $ 9,235 30,000

Xerox 5335 35 $ 8,900 45,000

Xerox 5042 book copier 35 $ 9,470 40,000

Xerox 5046 35 $ 9,670 45,000 AB Dick K357

Xerox 5340 40 $ 11,900 50,000

Xerox 5345 45 $ 16,275 65,000

Xerox 5050 50 $ 11,095 65,000

Xerox 1050 50 $ 12,650 65,000 AB Dick K555

Xerox 5350 50 $ 16,800 50,000

Xerox 5053 53 $ 18,775 65,000

Xerox 5052 55 $ 15,990 65,000 AB Dick K557

Xerox 5355 55 $ 20,625 65,000


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MODEL SPEED PRICE VOLUME TO ALSO SOLD AS

Xerox 5065 Oct 62 $ 27,600 125,000

Xerox 5065 Fin 62 $ 29,495 125,000

Xerox 5365 Oct 65 $ 28,100 125,000

Xerox 5365 Fin 65 $ 29,995 125,000

Xerox 1075 70 $ 31,575 200,000

Xerox 5380 80 $ 37,495 150,000

Xerox 5385 80 $ 41,495 150,000

Xerox 1090 92 $ 63,100 400,000

Xerox 5388 HCS 92 $ 75,950 400,000

Xerox 5388 Fin 92 $ 79,000 400,000

Xerox Docutech 90 92 $ 160,000 500,000

Xerox 5100 100 $ 99,500 400,000

Xerox 9500VR 120 $ 85,000 100,000

Xerox 9500 120 $ 86,400 100,000

Xerox 9900 120 $ 104,775 1,000,000

Xerox 5090 135 $ 154,000 1,000,000

Xerox 5390 135 $ 154,000 1,000,000

Xerox Docutech 135 135 $ 245,000 1,000,000

Changing Distribution Structures

As a consequence of shrinking gross profit margins on sales transactions, dealers have

moved further up volume in their territories, de-emphasizing the sales of low-end copiers. It was

not unusual for a dealer to instruct sales representatives not to prospect or make cold calls for low-

end units. Rather, low-end units should only be part of a larger, more lucrative sale. If a large

order includes low-end copiers, dealers will fulfill the order, but they will not prospect for low-end

business. As sales representatives effectively exit from low-end sales, new dealer placements in the

low end of the market will further decline.

User Maintenance.Based on experience in the low-end printer market, users were capable

of replacing items such as corona wires and wiper blades when these items are provided in a

prepackaged preventative maintenance kit and sold over the counter. The combination of long-life

photoreceptors and user repair allowed copier vendors to provide user maintained maintained of

low-end copiers. Obviously, user maintenance further eroded the dealers ability to sell

maintenance contracts into low-volume copier applications. The Office Products Analyst, a

monthly newsletter devoted to the cost/performance analysis of office products, conducted annual

copier reliability studies based on input from 212 copier dealers. Kodak, Xerox and Pitney Bowes

- companies distributing only through their own direct sales forces - were not included. The results

shown in Table 22 identify the recommended purchase list from the survey results. The speed in

cpm, the retail price, the maximum copy volume, and the reliability measure (100 is best) are

listed. The bold print represents the best in class models as selected by the independent dealers

representing Japanese manufacturers. Many of the models were also sold OEM to other firms.

Falling Dealer Profit Margins. Because the Japanese manufacturers relied heavily on

independent dealers to bring copiers to market and because many manufacturers set up distribution

systems with overlapping territories, dealers were accustomed to competing on price. Price

competition was fierce in low end markets where it was an important buying factor. Price

discounting lowered margins on low-end copiers to the point where profits were nonexistent in

some transactions. For example, in Segment 1, a salesman may discount as deeply as 30 percent

off the suggested retail price of the product. If that product had a gross profit margin of only 45

percent, that would leave only 15 percent gross margin. By the time the dealer paid a direct sales


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representative a selling commission and covered administrative, installation, warranty, and

inventory carrying expenses, the dealer probably made no profit on the sales transaction. In order

to make a profit, the dealer would need to maintain the service and supplies business for this unit

throughout its useful life.

Table 22: Recommended Purchase List

MODEL SPEED PRICE VOLUME RELIABILITY ALSO SOLD AS

Canon CJ10 Color BJ 0.69 $ 5,999 500 93

Canon NP-1020 10 $ 2,325 5,000 85.5

Konica 1112 12 $ 2,300 5,000 88.5

Minolta EP 3170 17 $ 3,750 20,000 87.6

Panasonic FP-1780 17 $ 3,795 15,000 86.3 Lanier 6717/Pitney Bowes 9317

Panasonic FP-2080 20 $ 3,995 20,000 86.4

Minolta EP 4210 21 $ 4,895 25,000 86.5 Olympia 2100

Panasonic FP-2680S1 26 $ 7,653 25,000 85.6 Pitney Bowes 9326

Konica 2028 28 $ 5,880 40,000 86.1 ABDick7226

Minolta EP 5320 PRO 32 $ 7,535 50,000 86.2 Olympia 3201

Panasonic FP-3280S1 32 $ 8,653 35,000 85.8

Mita DC-3755 37 $ 6,595 45,000 85.6 Monroe RL-937/Gestetner 23337ZPanasonic FP-4080S1 40 $ 10,232 50,000 87.5

Minolta EP 5420 PRO 42 $ 8,675 80,000 88.7 Olympia 4200

Ricoh FT5570 43 $ 9,497 60,000 85.5 Savin 9335/Gestetner 2533ZD

Ricoh FT5590 50 $ 11,295 65,000 85.0 Savin 7430/Pitney Bowes D743

Canon NP-6650 50 $ 19,000 70,000 91.0 Kodak Ektaprint 90

Mita DC-5685 56 $ 16,995 75,000 85.9 Pitney Bowes 9056/Gestetner 2356ZDF

Konica 6090 60 $ 19,560 150,000 87.1 ABDick2060

Sharp SD-2060 60 $ 22,500 125,000 88.7

Mita DC-6090 60 100,000 85.6

Sharp SD-3062 62 $ 28,500 150,000 89.0

Konica 4065 65 $ 21,990 150,000 86.0 ABDick7463

Mita DC-7090 70 $ 20,995 100,000 85.0 Pitney Bowes 9070

Konica 5080 80 $ 26,920 150,000 87.1 ABDick7577

Canon NP-8530 83 $ 26,865 150,000 88.1 Lanier 6483

Mita DC-8585 85 $ 33,995 200,000 88.2 Gestetner 2485ZDF/

Alternative Distribution Channels. In the channel mix for 1993, dealer and distributor

outlets accounted for more than 50 percent of all sales. As dealers look askance at cold-calling for

very low-end placements, manufacturers are forced to employ discount and retail outlets for low-

end copiers. With permanent photoreceptors, user maintenance, and lower profit margins, the low-

end copier was being sold through alternate distribution channels. Without the need for a service

technician to set up the machine, the machine can, indeed, be sold off the shelf in a retail

environment where selling expense is relatively low and deep discounting can be maintained. As

product prices declined, and performance improved, a growing number of channels to sell copierswill provide new ways for customers to generate copies. While segment 1 sales were actually up in

1993, one manufacturer tried to increase its share of the dealer market by discounting its price to

dealers. Other manufacturers pushed products through distributor

guide for purchase of a photocopier

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